Goldman Sachs Group Inc. would be among banks most impacted in recommendations issued Thursday by U.S. banking agencies that seek an end to merchant banking and a limit on Wall Street's ownership of physical commodities.

The report -- based on a multi-agency study of banks' investment activities required by the Dodd-Frank Act -- highlighted ways to fix potential risks that the agencies didn't think were handled by the law's Volcker Rule ban on certain trading and investments. Among the suggestions was a call that Congress repeal merchant banking powers and the ability of certain banks to engage in physical commodities businesses -- both hallmarks of Goldman Sachs' business.

The Office of the Comptroller of the Currency also said it planned to curtail a bank's ability to hold copper and to restrict lenders' holdings of hard-to-value securities. Additional Fed recommendations include repealing exemptions for industrial loan companies, which are lenders generally owned by non-financial firms, that allow them to operate outside of rules that affect banks.

Goldman Sachs booked $1.2 billion in revenue through the first six months of this year in its division that houses the firm's merchant banking business. Equity investments contributed $626 million of the total. The firm doesn't break out its merchant banking figures in regulatory filings.

The Fed's section of the report said its aim was to level the playing field among financial firms and "help ensure the separation of banking and commerce."

The agencies, also including the Federal Deposit Insurance Corp., were required to issue the report to Congress and the Financial Stability Oversight Council almost five years ago.

It was called for by a provision tucked more than 200 pages into Dodd-Frank under section 620. Lenders' government watchdogs had to review the industry's investment activities to determine whether they "could have a negative effect on the safety and soundness" of the financial system. But the mandate was easy to lose track of next to the passage that preceded it: section 619, which is better known as the Volcker Rule.

Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co. were the targets of criticism that led to a 2014 Senate investigation into their commodities practices. It found lenders used their ownership of metals and other physical commodities to dominate markets and gain unfair trading advantages. The physical commodities businesses at Goldman Sachs and Morgan Stanley were protected by grandfathering that allowed them wider abilities than most banks -- an advantage the Fed is seeking to end.

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